What is Employee Profitability in a Motorcycle Dealership?

Introduction

In the motorcycle dealership industry, profitability is a key metric that is used to measure the success of a business. One way to measure profitability is by looking at the net profit before tax (NPBT) divided by the total number of dealership employees. This metric can be used to compare the profitability of different dealerships, as well as to track the profitability of a dealership over time.

What is NPBT?

Net profit before tax is a financial measure that represents a company’s profit before taxes are paid. NPBT is calculated by subtracting all of a company’s expenses from its revenue. This includes things like salaries, wages, rent, utilities, and cost of goods sold.

How to calculate NPBT per employee

To calculate NPBT per employee, divide the NPBT of a dealership by the total number of dealership employees. For example, if a dealership has an NPBT of $100,000 and 10 employees, then the NPBT per employee would be $10,000.

Why is NPBT per employee important?

NPBT per employee is an important metric because it can be used to compare the profitability of different dealerships. A dealership with a high NPBT per employee is generally more profitable than a dealership with a low NPBT per employee. This is because a high NPBT per employee means that the dealership is generating a lot of profit for each employee that it has.

What are the factors that affect NPBT per employee?

There are a number of factors that can affect NPBT per employee, including:

  • The sales volume of the dealership
  • The average profit margin of the dealership
  • The cost of goods sold
  • The salaries and wages of dealership employees
  • The rent and utilities of the dealership

How can motorcycle dealerships increase their NPBT per employee?

There are a number of things that motorcycle dealerships can do to increase their NPBT per employee, including:

  • Increasing sales volume
  • Increasing the average profit margin
  • Reducing the cost of goods sold
  • Reducing salaries and wages
  • Reducing rent and utilities 

 

Conclusion

NPBT per employee is an important metric that can be used to measure the profitability of motorcycle dealerships. By tracking NPBT per employee, dealerships can identify areas where they can improve their profitability.

The specific number that a dealership should aim for in terms of net profit before tax (NPBT) per employee will vary depending on a number of factors, including the dealership’s location, size, and product mix. However, as a general rule of thumb, dealerships should aim for an NPBT per employee of at least 10%.

There are a number of factors that can affect a dealership’s NPBT per employee, including:

  • Sales volume: Dealerships with higher sales volumes tend to have higher NPBT per employee.
  • Profit margin: Dealerships with higher profit margins tend to have higher NPBT per employee.
  • Cost of goods sold: Dealerships with lower costs of goods sold tend to have higher NPBT per employee.
  • Salaries and wages: Dealerships with lower salaries and wages tend to have higher NPBT per employee.
  • Rent and utilities: Dealerships with lower rent and utilities tend to have higher NPBT per employee.

 

Additional Resources

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